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New Claims Process – Details emerging

Details are now starting to emerge as to the shape of the new Claims Process for RTA claims with a value of up to £10,000. Crucially, as reported in an article in the latest edition of New Law Journal, “three aspects remain confidential pending final consideration by stakeholders with the MoJ [including] the final cost matrix for the new work flow”.

The article confirms that fixed costs will be payable at the end of each of the three stages of the process. Nice and simple then? Not quite. The article states: “New timelines for responses at each stage will govern the process. Failure to keep up with the timetable will result in the claim exiting from the fixed-cost process”. Further: “Any other type of contributory negligence claim [except seatbelt issues] will be required to exit the system into the predictable costs regime”. Yes, the predictable costs regime really has survived the new Claims Process.

So it now appears we will have three different costs regimes applying to low value RTAs: fixed fees for cases within the new Claims Process, different fixed fees (ie predictable costs) for cases that fall outside the Claims Process but settle pre-proceedings and standard basis costs (presumably covering those cases where liability is not agreed and proceedings are issued. Costs in low value RTA claims appear to be about to become more complex. How will these various regime’s interrelate? (This is the question I raised in this post almost exactly one year ago.) We’ll hopefully discover very shortly.

A further oddity is that “when estimating the value of a claim no account is to be taken of credit hire or vehicle damage costs”. No doubt very sensible and this is clearly designed to avoid some of the excessive fees currently generated by “bent metal” claims. However, the predictable fee regime survives where these factors can be taken into account when valuing a claim. So credit hire and vehicle damage will count for one scheme but not the other. Are you keeping up so far?

To add to the fun we are told that “new Pt 36 sanctions are still being considered”.

Existing methods of funding the claim such as BTE, CFA and ATE will continue to be available.

The new Claims Process contains a streamlined court assessment of damages and the presumption is that this will be a paper hearing. To “preserve the claimant’s human rights” they can opt for an oral hearing. “Separate fixed costs have been agreed between stakeholders for either the paper or oral hearing”. If the costs for the oral hearing have been fixed sufficiently high to cover the additional work that is required can we expect to see a surprising number of claimants opting for the oral hearing?

My prediction based on the information available to date: two years of costs chaos.